06 April 2011
Posted in Property Info

You would like to purchase your ideal property in Golf del Sur or Amarilla Golf, but do not have the required capital for the purchase. Your first thought is “Well never mind perhaps we will have enough to purchase next year”. Why give up - when you can purchase with a Spanish mortgage? Spanish banks work in much the same way as they do in the UK, with various mortgage products available to both residents and non-residents alike.

Choosing the right mortgage for your property in the Golf del Sur and Amarilla Golf region is of course dependent upon your own personal financial situation and criteria. An important note to remember is that having purchased your property with a mortgage, you will be given two deeds (Escrituras). One deed is for the mortgage and the other deed is for the purchase, which you will be given upon completion of the property sale at the notary.

The Mortgage Service

Your estate agent will have a list of banks that can offer you a variety of quotes on a mortgage, which will include all costs and expenses, repayment figures etc. Your agent will also take you to the bank and introduce you to the relevant people who can handle the mortgage arrangements for your Golf del Sur property. You will then be able to ask any questions you may have, then and there and also have the relevant contact details to be able to do the same once you return home.

The lending bank will organize your mortgage from start to finish keeping you and your agent informed at every step of the purchase procedure. Banks have their own “in house” legal team who deal with all aspects of the purchase of your property but you are also free to employ your own independent lawyer who can oversee everything for you in conjunction with the bank.

It is important when dealing with a bank that they have someone who not only speaks your native language but can also explain things so that you can understand them; someone who is accustomed to dealing with overseas clients and who will not only be helpful during the purchase period, but also in the future. We’d strongly suggest listening to your agent’s recommendations in regard to these aspects, especially if they have an established history in the area. They will know who the best and most flexible bank will be for your given situation, and which bank will have the right contact person for your needs.

How Much Could I Borrow?

This tends to vary from bank to bank especially in the current financial climate, your personal criteria is always factored into this as well. 100% mortgages are a thing of the past at the moment, but who knows what the future may bring. For properties in Tenerife, banks are currently lending non-residents up to 70% of the value of their property - based on an official valuation carried out by the banks recommended valuation company.

Residents can currently receive 80% plus of the value of their property, once again based on an official valuation.

When you get a quote for a mortgage from your chosen bank, all of these figures will be factored in - giving you a final offer and letting you know an exact amount of money that you need to find over and above your mortgage, as a deposit for the completion of your property purchase. (Independent lawyer not included).

Cost of Repayments?

Interest rates vary from bank to bank depending upon what kind of mortgage you have on your Golf del Sur property, Loans can be taken with fixed or variable interest rates, and the term of the loan can be affected by your age. Most banks will approve mortgages up to the age of 70.

Interest rates are lower in Europe than they are in the UK and are set against the Euribor. Euribor rates can easily be checked by calling at any local bank or in any of the financial sections of the local papers or internet sites. Generally your mortgage repayment interest rate will be at least 1% above the Euribor.

Each and every bank has a mortgage calculator that allows you to calculate the repayments due on your property each month. This calculator shows you how much you would repay at different levels of interest and different lengths of term of mortgage. Once again, listen to your agent who will have good knowledge of the current situation with each local bank.

What Paperwork Will I Need

When applying for a mortgage on your dream Golf del Sur property you will need to give the lending bank as much information about your financial affairs as possible to allow them to assess the risk. As a general “rule of thumb” guide (although it could be more or even less) the amount of information they need is as follows:-

For an employee

Employment contract – 6 months bank statements – 6 months pay slips – last p60 – copy of your passports – proof of any other source of income – full Experian credit report

For self-employed

2 years audited company accounts - 6 months bank statements – copy of your passports – proof of any other source of income – full Experian credit report

Summary

Whether you are buying a small Amarilla Golf apartment or an extremely large Golf del Sur villa, it always pays to shop around the various banks and talk to your agent to see what is on offer and who can give you the best deal. Taking out a mortgage is a big step so tread carefully. Study everything in detail, ask as many questions as you can and above all do not do anything until you are happy that you understand what you are about to undertake. A mortgage gives you the opportunity to own your dream Golf del Sur property or Amarilla Golf property long before you would have been able to afford to buy it outright, so take some time and check into mortgages. With current prices at basement levels, securing a property at today’s prices may well turn out to be the best investment you ever made!

Article written by specialist property experts from Homes and Away with more than a decade's experience in Golf del Sur